By Aditi Shah
HANSALPUR, India (Reuters) -Japan’s Suzuki Motor will invest 700 billion rupees ($8 billion) in India over the next five to six years, its chairman said on Tuesday, as production of the automaker’s first electric vehicle began.
Through its majority stake in Maruti Suzuki, Suzuki Motors already produces 17 models in India for export to around 100 countries, including back to Japan. It will now also become the global production hub for the company’s electric cars.
Shares of Maruti Suzuki rose 2.6% to an all-time high after the investment was announced during an event to mark the start of commercial production of the mid-sized “e Vitara” SUV at its Gujarat plant in the village of Hansalpur Becharaji.
Maruti will export between 50,000 and 100,000 of the EVs a year, its chairman RC Bhargava said. He added that there was not yet a timeline for a launch in India, the world’s third-largest car market in which Suzuki commands a leading 40% share, in part due to the high cost of batteries that would push up costs for price-conscious local consumers.
The e Vitara will compete with Hyundai’s Creta and Mahindra’s XEV 9e.
Suzuki Motor earlier this year trimmed its sales target in India, its biggest market by sales and revenue, and also scaled back its electric vehicle plans amid intensifying competition in the South Asian nation and a global slowdown in EV sales.
EV sales growth in India is still outpacing the overall car market and electric models account for about 4.5% of all cars sold in the current fiscal year from April 1. The government is maintaining a target of a 30% share by 2030.
The Gujarat plant is set to become one of the world’s largest automobile manufacturing hubs, with a planned capacity of 1 million units, said Suzuki Motor chairman and president Toshihiro Suzuki.
It is surrounded by low-lying industrial units housing suppliers to Suzuki and other companies in the area.
Indian Prime Minister Narendra Modi, who attended Tuesday’s event and plans to visit Japan next week, said the plant, including the e Vitara, was a “big leap” towards the government’s ‘Make in India’ goal.
He again urged people to buy local products, saying that included anything made on Indian soil, irrespective of where the investment came from, including Maruti’s cars.
($1 = 87.5060 Indian rupees)
(Reporting by Aditi Shah, Kashish Tandon and Nandan Mandayam; Editing by Muralikumar Anantharaman, Kirsten Donovan)
